Fixed deposits are one of the safest avenues when we talk about investment. A decision to invest in fixed deposit varies from person to person. One might be seeking future returns through it, while the other trusts the medium where his money would be safe. Nonetheless, both these categories of people ultimately avail both the benefits – safety along with fruitful returns. One of the most interesting parts about FD is that you know how much you are going to make when your deposit matures.
FD beneficial returns depend upon three factors such as the amount that you are depositing, the tenure for which you are depositing and the rate of interest that is being offered to you by the bank. Thus in order to earn more from your fixed deposit, it is essential that you study about the interest rates prevailing in the market. A sound knowledge of the same will help you select the right bank or Non-Banking Financial Companies’ (NBFC) service which you help you earn better over a period of time. You can also analyse how much interest your will earn after maturity with the help of FD calculator.
There are several advantages that come with FD. You can use these advantages to earning more from it. There are few steps that you can take which will help you get better returns over a period of time.
- An annual Tax deducted at source (TDS):
A TDS, if deducted annually, will help you earn better returns than if it is done quarterly or semi-annually. Thus, it is necessary that you seek proper knowledge about the same. In order to avail maximum benefits from TDS, you must make sure that TDS should be charged annually.
- Split your fixed deposit:
If your income through rate of interest is more than INR 10,000 per year then 10% TDS charge is applicable. Thus in order to avoid being charged, you can split your FD into two. You can do that by opening the fixed deposits account in two different branches. And amount can thus be split into these two branches to avoid the charge.
- Keep on reinvesting:
A sizeable income can be earned through rate of interest. Fixed deposit interest rate can be used to reinvest in other sectors. When your deposit matures over the course of time, you can either withdraw it or reinvest it. If you withdraw it you go away with the benefits you earned in that period but if you reinvest than you can increase your returns in few years.
The process of making the most out of fixed deposit investment depends upon the age as well. People who are young, between the ages of 25-30 prefer taking a risk by investing in shares and mutual funds. Fixed deposit is usually suggested to people who are over the age of 50 but that’s just a myth. A fixed deposit can go a long way in helping you to accomplish long term goals.
One of the most popular aspects of fixed deposit is the Company Fixed Deposit. When investors place their deposit with the companies for a particular period of time at a fixed rate of interest, they are investing in CFD. The companies provide services which are similar to that of a bank. In some cases, the services offered are even better than a bank. Non-Banking Financial Companies are providing various services to the customers as well.
An individual must select a proper investment method after proper evaluation. There is no denying that fixed deposit investment is the safest one. And over a period of time, one can achieve considerable return through rate of interest.